With the recall effort more successful than anticipated, Gov. Scott Walker has been increasingly on the defensive. In particular, Walker has had to justify the 2011 Budget Repair Bill that took away collective bargaining rights for most public workers and reduced the amount of benefits they received. Thus it is natural that Walker has been spending a lot of time promoting studies claiming that the legislation has been successful in saving jobs. At least, that’s what Scott Walker wants the numbers to say. But are the findings accurate? Unfortunately for the governor, the answer is a lot less clear than he claims.
The numbers that Walker highlights are fairly straightforward: this year, the school districts that did not implement his reforms laid off the most teachers (and by a long shot, too—the majority of the teachers laid off in Wisconsin were in these districts, despite having only one tenth of the students). On the same token, districts that did implement the reforms are in a much better position than they would have been, and thus don’t have to lay off as many teachers. These findings have supported Walker’s claim that the law saves jobs. Granted, I’m a little surprised by how much coverage these studies are getting, seeing as the results are really unremarkable. Further, they openly undermine Walker’s biased interpretation.
While the law technically eliminated collective-bargaining rights, it’s a lot simpler to say that it does something else—namely, reduce wages. Employees receive benefits in exchange for lower wages. This means that it’s “close enough” to say that a loss of benefits is functionally the same as a loss of wages.
Secondly, unemployment increases in recessions because wages don’t adjust to economic downturns. Say that a company pays its workers as much as it does because it expects to make a certain amount of money this year. If it suddenly makes less money than this—say, because the economy is in free-fall—it’s stuck with more workers than it can afford. If all of these workers would accept pay cuts, then they could keep their jobs. Unfortunately, due to a combination of confidence and stubbornness, these pay cuts don’t happen, forcing the employer to fire some of these workers. This is what an unemployment problem looks like, and it won’t go away until either worker pay is generally lower (unlikely) or total spending in the economy recovers (also unlikely, except with government intervention).
What Scott Walker has managed to do is force the public-employee market to do what businesses usually won’t—lower wages to keep employees. In this regard, the results are predictable. But what happens after the recession ends? Normally, increased revenues lead to business expansion, meaning that more workers must be hired or wages must be increased to keep workers from jumping ship to other companies. In other words, everything goes back to normal, as if the recession never happened.
But Scott Walker didn’t “just” cut wages—collective bargaining rights are going to be gone even when the downturn is over. It’s more accurate to say that Walker cut wages indefinitely. In other words, things won’t be going back to normal again—public workers will be worse off. This would make sense if public workers were generally overpaid, but public workers in general make less than private-sector workers with similar backgrounds.
I won’t deny that Scott Walker’s budget bill prevented teachers from losing their jobs. Given the fact that Wisconsin can’t engage in deficit spending to keep the economy afloat, this kind of wage adjustment is probably the best option we have. But this kind of adjustment doesn’t require that the wage cuts be permanent—it would have been even better to reduce public-employee compensation contractually, rather than removing collective-bargaining rights indefinitely. Seeing as the teachers’ unions in particular were willing to do this after the budget bill was introduced, Walker could have gotten this deal if he had wanted it. But Walker didn’t want teachers to get their benefits back. When Walker says that his reforms are “working,” he means a very particular thing: they pulled down teachers to keep the state afloat, and won’t be letting them back up again.
Zach Thomae is a freshman majoring in computer science. Do you disagree with Zach’s diagnosis? Then send a letter to opinion@dailycardinal.com.
